Diabetes is the 7th leading cause of death in the U.S., and some 1.7 million new cases are diagnosed per year. Nearly 30 million in the U.S. have diabetes, with annual healthcare costs estimated at $245 billion. Diabetes patients suffer from complications associated with diminished or dysfunctional insulin levels. The prognosis for diabetes patients is grim. If not properly managed, glucose imbalance will lead to severe complications such as blindness, kidney failure, amputations, heart failure and stroke. Current treatment options include diet, exercise, insulin replacement and glucose-modulating drugs. There are several classes of glucose-lowering drugs on the market that act in different ways to lower blood-glucose levels: through stimulating production of insulin, enhancing insulin activity, increasing glucose absorption and/or decreasing glucose production in the liver. However, no current drug therapies address the physiological source of the problem-i.e., deteriorated pancreatic ? cell mass and function. Pancreatic ? cells produce insulin. Development of therapeutics that promote glucose homeostasis through regeneration and/or replenishment of insulin-producing ? cells in the pancreas is needed. ? cell regeneration therapy holds promise for replacing the use of pharmaceutical insulin and anti-diabetic glucose-lowering drugs, while simultaneously improving quality of life and reducing complication risk. The SBIR goal is to prove the feasibility of using our candidate drugs - inhibitors of the enzyme BACE-2 - to enhance ? cell proliferation and mass and to promote glucose homeostasis. Preliminary work done by the interdisciplinary Jortan R&D team demonstrates the potential for designing selective BACE-2 inhibitors to support this approach. For this Phase I feasibility project, Jortan will pursue three Aims: 1) design inhibitors of BACE-2 and assess potency and selectivity in vitro; 2) measure PK and tissue distribution for selected inhibitors; and 3) determine feasibility for selected inhibitors to improve glycemic control and enhance ? cell proliferation. This project will provide data to address the key question: Can our novel BACE-2 inhibitors effectively reduce blood glucose and serum insulin levels? Do these inhibitors enhance pancreatic ? cell proliferation and/or mass? Phase I success will lead to a Phase II project focused on a study with increased numbers of mice to validate the results and provide for early safety and toxicity studies. These studies, along with additional studies funded by engagement with private-sector Phase III commercialization partners, will be necessary to move the drug through FDA-standard, IND-enabling pharmacokinetic, toxicology and mutagenicity studies to lead to clinical trials in human. As envisioned, development/commercialization of a novel BACE-2 inhibitor therapeutic is expected to limit progression of diabetes and ameliorate the associated symptoms-decreasing morbidity, improving patient quality of life, and significantly reducing treatment costs.